Since the start of the pandemic, the steel industry had to deal with the constraints just like all manufacturing companies across the globe. Supply chains were disrupted and materials were not as available. The cost of materials has also increased since which has meant that customers have also had to ensure more expensive materials for construction, agricultural and other such projects. On top of all of this, the steel industry has also witnessed an increase in pressure from the perspective of sustainability. The need for reduced carbon measures is more important than ever. So how has this affected the steel industry globally and, in particular, Southern Africa?
Global Highlights of Steel Industry News
Record high steel prices: The steel industry has seen record high prices in 2021 due to strong demand from the construction and automotive industries, as well as supply chain disruptions caused by the COVID-19 pandemic.
Mergers and acquisitions: The steel industry has seen a number of mergers and acquisitions in recent years, with companies looking to consolidate and increase their market share. Notable examples include the merger between ThyssenKrupp and Tata Steel Europe, and the acquisition of AK Steel by Cleveland-Cliffs.
Environmental concerns: The steel industry is facing increasing pressure to reduce its carbon footprint and transition to more sustainable production methods. Many companies are investing in new technologies, such as hydrogen-based steelmaking, to reduce their environmental impact.
Trade disputes: The steel industry has been caught up in a number of trade disputes in recent years, particularly between the United States and China. These disputes have led to tariffs and other trade barriers, which have had an impact on global steel prices and trade flows.
Capacity expansions: Despite the challenges facing the industry, many steel companies are investing in new capacity to meet growing demand. Notable examples include ArcelorMittal’s plans to expand its steelmaking capacity in India, and the construction of new steel plants in countries such as Vietnam and Indonesia.
Demand recovery: After a slowdown in 2020 due to the COVID-19 pandemic, the global steel industry has seen a strong recovery in demand in 2021. This is largely due to increased demand from the construction and automotive industries, as well as government stimulus measures in many countries.
Supply chain disruptions: The steel industry, like many others, has been affected by supply chain disruptions caused by the COVID-19 pandemic. This has led to shortages of raw materials, such as iron ore and scrap, as well as delays in shipping and logistics.
Digitalisation: The steel industry is increasingly adopting digital technologies to improve efficiency and reduce costs. These technologies include automation, machine learning, and the Internet of Things (IoT).
Shift towards electric arc furnaces: The steel industry is undergoing a shift towards electric arc furnaces (EAFs), which use scrap metal as their primary raw material. EAFs are considered to be more environmentally friendly than traditional blast furnaces, which use iron ore and coal.
Geopolitical tensions: The steel industry has been caught up in a number of geopolitical tensions in recent years, particularly between the United States and China. This has led to tariffs and other trade barriers, which have had an impact on global steel prices and trade flows.
Southern Africa Highlights of Steel Industry News
ArcelorMittal South Africa: In May 2021, ArcelorMittal South Africa announced that it had reached an agreement with the government to provide tariff protection for the domestic steel industry. This was seen as a positive development for the struggling company, which has been facing competition from cheaper imports.
New steel plant in Zimbabwe: In February 2021, Chinese firm Tsingshan Holding Group announced plans to build a $1 billion steel plant in Zimbabwe. The plant will produce stainless steel and is expected to create thousands of jobs.
South Africa’s steel exports: According to data from the International Trade Centre, South Africa’s steel exports increased by 18% in 2020, despite the challenges posed by the COVID-19 pandemic. The country is a major exporter of steel to other African countries.
Steel industry challenges: Like many other industries in the region, the steel industry in Southern Africa has been facing challenges related to the COVID-19 pandemic, as well as structural issues such as high energy costs and insufficient infrastructure.
Regional integration: There have been efforts to increase regional integration in the steel industry in Southern Africa, with the Southern African Development Community (SADC) working to promote cooperation and investment in the sector. However, progress has been slow, and there are still barriers to trade and investment between countries in the region.
South Africa Highlights of Steel Industry News
Partnership to improve safety: In August 2020, the South African Reinforced Concrete Engineers Association (SARCEA) announced a partnership with the Department of Employment and Labour to improve safety in the reinforcing steel industry. The partnership aims to promote compliance with safety regulations and reduce accidents in the industry.
Expansion plans: In February 2021, South African reinforcing steel contractor, BRC Mesh Reinforcing, announced plans to expand its operations in the country. The company plans to open a new manufacturing plant in Gauteng, which will increase its capacity to produce reinforcing steel products.
Skills development: The South African reinforcing steel industry has been investing in skills development to address the shortage of skilled workers in the sector. For example, the Reinforcing Steel Contractors Association of South Africa (RSCASA) has been offering training and apprenticeships to young people to help them enter the industry.
Sustainability initiatives: There has been growing interest in sustainability initiatives in the South African reinforcing steel industry, with companies looking to reduce their environmental impact and improve their social responsibility. For example, some companies have been investing in renewable energy and water conservation, while others have been working to improve working conditions for their employees.
COVID-19 impact: Like many other industries, the South African reinforcing steel industry has been affected by the COVID-19 pandemic, with disruptions to supply chains and a decrease in demand for construction projects. However, the industry has been gradually recovering as the country’s economy reopens.